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Natural Gas Generation Construction Enjoys 28% Decline from 2013

EIA study compares reductions in construction costs for most power plant types.

Jul 11, 2017

The Energy Information Administration (EIA) has determined that there have been significant reductions in construction costs for many generator types in recent years. Annual changes in construction costs include the effects of differences in the geographic distribution of installed capacity between years, differences in technology types, and other changes in capital and financing costs.

Electric generator construction costs from 2013 through 2015.

For natural gas, about 60% of the capacity added in 2015 was new generators at new plants, and the remaining 40% were new generators at existing plants. For other fuels such as hydro and petroleum liquids, which had relatively little capacity added in 2015, almost all of those additions were located at existing plants. Construction costs for battery storage units are available for the first time in 2015.

The average cost of natural gas generators installed in 2015 was $696/kW, a 28% decline from 2013. Nearly 75% of the natural gas capacity installed in 2015 were combined-cycle units, which had an average installed cost of $614/kW. Combined-cycle natural gas plants include at least one combustion turbine and one steam turbine and are generally more efficient than plants with combustion turbines alone. About 1.5 GW of natural gas plants with only combustion turbines were installed in 2015, at an average cost of $779/kW. Natural gas plants with internal combustion engines were more expensive, averaging $1,798/kW for the 0.2 GW installed in 2015.

The full EIA press release on gas-fired and other key types of generation and associated data is available at this link. A similar Energy Times story presents EIA’s results for utility-scale solar PV plants. ♦